Right now I have an ex-pen and a crate I use for night only. So I get up in the night with her every 3 hours and take her to an Ugodog with a pee pad on it. (I haven't gotten so far as to put the pad under the Ugodog grate yet, but will cut the pad down and eventually it will just be the grate exposed).

So then she goes back into the crate. In the morning she is placed in the ex-pen while she eats and I get organized. Then she gets taken out for playtime until I think she may need to pee. Then back to the ex-pen. So during the day its playtime out of the ex-pen and then ex-pen. What I don't understand is why its recommended by some to crate her during the day as well for reason of you knowing when she has to go potty. She is having no problems using the paper pad in the ex-pen so I assume its okay then to not crate her during the day.

Am I correct or totally wrong here as I want to be sure I'm going about this the right way and not setting myself up for a very wrong direction.

You're doing it the way we do (except for the getting up every 3 hours part), and it sounds like it's going good. We don't use a crate in the potty training process, except for them to sleep in at night. Since she's finding the pad in the expen, I don't see any need for the crate, unless you were trying to train for outside only.

You are teaching her to wake up every three hours. If the crate is next to your bed on a chair, or something that raises it up to a good height, I'd wait for her to wake you up. She will stir, or spin, or scratch, or whimper when she needs to get out to potty.

She will smell the pad under the grate. I'd let her pee on it once, and then put it under the grate. Make sure the box stays in the same place for now.